Opinion
T1 Magna G. Hahnel, Cheryl Pietz, and Carol J. Stewart (collectively, Buyers) appeal the trial court's entry of summary judgment and award of attorney fees in favor of Du-chesne Land, LC and Highland Development, Inc. (collectively, Sellers). We affirm.
BACKGROUND
T 2 In March 2004, Buyers purchased a lot with an option to build a cabin in Duchesne County, Utah. The transaction was memorialized in two contracts: an agreement for the purchase of the lot between Buyers and Du-chesne Land (the Land Purchase Agreement) and a building sales contract between Buyers and Highland Development (the Building Contract). Due to unanticipated delays, Sellers offered to exchange Buyers' lot for a more valuable lot at no additional charge. Buyers accepted the offer, and the lot exchange was memorialized in a third agreement (the Exchange Agreement) that states, "Highland Development, Inc. has a projected completion date of cabin construction Sept. 80, 2004. However, Highland Development, Inc. will make every effort to have the cabin completed by Labor Day." The Exchange Agreement did not contain a provision indicating that time was of the essence.
T3 Thereafter, Buyers obtained a construction loan for the cost of building the cabin and pledged the lot as security. During construction, a dispute arose between Sellers and Duchesne County that resulted in the cabin not being completed by September 2004, In addition, Buyers gave Sellers a punch list of items they claimed needed attention on three separate occasions between February and May 2005.
4 Sellers eventually completed the cabin, and Buyers received a permanent certificate of occupancy on June 3, 2005. Shortly thereafter, a painter informed Buyers that the cabin was infested with mold. Buyers notified Sellers of the problem and offered to sell them the cabin for $118,000. In response, Sellers offered to take the cabin and to refund $85,518.90, which they claimed was the sum of all amounts paid by Buyers to date. When Buyers refused, Sellers hired a contractor to remediate the mold. Buyers sought and were granted several extensions of their construction loan.
T5 On September 12, 2005, Buyers sued Sellers, claiming that they had breached the Building Contract by (1) not completing it on time, (2) failing to rectify the punch-ist items, and (8) delivering a cabin infested with mold. 1 After filing the complaint, Buyers made no further effort to keep the construction loan current or to obtain permanent financing. On November 10, 2005, the construction lender notified Buyers that the loan was in default and that the lender intended to initiate foreclosure proceedings. Buyers did not bring the loan current, and the cabin and lot were sold at a foreclosure sale on April 11, 2006.
T7 In response, Buyers disputed Sellers' claim that Buyers had forfeited their right to damages by failing to mitigate, asserting that they were entitled to recover their down payment and the equity in the lot and cabin. Buyers also claimed that the Land Purchase Agreement and the Building Contract were part of a single agreement and that the attorney fees provision was applicable to both. Although the express terms of the provision afforded only Sellers the right to recover their attorney fees, Buyers argued that they were also entitled to recover attorney fees pursuant to Utah Code section 78B-5-826 (the Reciprocal Fee Statute) See Utah Code Ann. § 78B-5-826 (LexisNexis 2012) 2 ("A court may award ... attorney fees to either party that prevails in a civil action based upon any ... written contract . when the provisions of the ... written contract ... allow at least one party to recover attorney fees.").
T8 On August 11, 2008, the trial court issued a ruling and order agreeing with Sellers that Buyers had not mitigated their damages and therefore concluded that Buyers could not recover the loss of their down payment or the loss of their equity in the project, However, the trial court adopted Buyers' position with respect to attorney fees, determining that the Land Purchase Agreement and the Building Contract were an integrated agreement and that the attorney fees provision applied to both. In addition, it concluded that under the Reciprocal Fee Statute, Buyers were "entitled to attorney fees as a matter of law ... on matters which they recover damages for."
19 After a four-day trial on Buyers' remaining claims, the jury determined that Sellers had not breached the contract. As a result, the jury never reached the issue of damages. Sellers then moved for an award of attorney fees. Buyers opposed the motion, arguing that the attorney fees provision was of limited seope and did not entitle Sellers to an award simply because they were the prevailing party. The trial court disagreed, stating that because it had ruled in its earlier order that Buyers were eligible for attorney fees under the Reciprocal Fee Statute, Sellers were necessarily entitled to an award of attorney fees incurred in suceessfully defending against Buyers' claims. After the trial court denied their motion for reconsideration, Buyers filed a timely appeal.
ISSUES AND STANDARDS OF REVIEW
{ 10 Buyers first challenge the trial court's grant of summary judgment in favor of Sellers on damages. They argue that the erroneous ruling limited the damages evidence that Buyers could present to the jury, thereby impacting the jury's decision on liability. "When determining the propriety of a trial court's grant of summary judgment, we review the trial court's legal conclusions for correctness, affording those conclusions no deference." Joseph v. McCann,
T11 Buyers next challenge the trial court's award of attorney fees and costs to Sellers, arguing that the terms of the attorney fees provision do not apply to Sellers' successful defense of the breach of contract claims. "Whether attorney fees are recoverable in an action is a question of law, which
ANALYSIS
I. Buyers' Damages Claim is Moot.
{112 We begin our analysis with Buyers' claim that the trial court erred in limiting the damages they could request at trial. Specifically, Buyers argue that they were denied the right to a full and fair presentation to the jury because evidence of greater damages could have swayed the jury's determination of whether Sellers had breached the Building Contract. In response, Sellers contend that this issue is moot due to the jury's determination that Sellers did not breach either contract.
"113 "An issue is moot when resolution of it cannot affect the rights of the parties." Cox v. Cox,
114 Nor are we persuaded by Buyers' argument that evidence of greater damages was relevant to the lability determination. Essentially, Buyers claim that the jury might have found Sellers in breach if Buyers' injury had been greater. Whether there was a breach is an independent inquiry separate from the issue of damages. The jury was instructed to decide whether Sellers breached the Building Contract based on its terms and the evidence related to performance. Only if the jury found Sellers in breach was it to consider the extent to which that breach damaged Buyers. We presume that the jury understood and followed these instructions. See generally State v. Nelson,
II. Sellers Were Enforcing the Building Contract and Are Entitled to Attorney Fees.
T15 The attorney fees provision states, "Buyer[s] shall pay all costs and expenses, including attorney's fees, incurred by Seller[s] in the enforcement of the terms of this agreement and/or the Trust Deed, whether or not a legal suit is brought by Seller{s] in connection therewith." Buyers contend that because Sellers did not advance any counterclaims or affirmative defenses, they did not incur any attorney fees "in the enforcement of the terms" of the Building Contract. Sellers respond that by proving no breach had occurred, they were enforcing the terms of the Building Contract. 3
116 "As a general rule, attorney fees are recoverable only if authorized by
117 In support of their argument that a purely defensive effort does not justify an award of attorney fees, Buyers point to our decision in Carr v. Enoch Smith Co.,
Smith took an entirely defensive posture. It was not enforcing any right arising under the agreement or arising from a breach thereof. On the contrary, its position at trial was that there was no viable contract left to enforce While Smith would surely be entitled to attorney fees under the more typical provision awarding fees to the prevailing party, it is not entitled to attorney fees under the provision at issue.
Id. at 1296 (citation omitted).
{18 Here, Buyers argue that since Carr, Utah courts have construed attorney fees provisions tied to "enforcement" of a contract as more limited in seope than provisions that award attorney fees to the prevailing party. However, each of the decisions relied upon by Buyers, like Carr, involved an attorney fees provision that required a default or failure to perform. See Faulkner v. Fornsworth,
119 The attorney fee provision in the Land Purchase Agreement explicitly requires Buyers to pay for attorney fees and costs that are incurred by Sellers "in the enforcement of the terms of this agreement" and does so "whether or not a legal suit is brought by Seller[s] in connection therewith." Based on that language, Sellers argue that the fee provision was triggered because the action was brought by Buyers to enforce their interpretation of the terms of the Building Contract and Sellers defended by asserting a contrary interpretation, even though "legal suit [was not] brought by Sell-erfs]."
20 Although the parties have pointed us to no Utah appellate decision that has addressed this precise question, other jurisdictions have considered similar issues. In Aspen Services, Inc. v. IT Corp.,
T21 A similar approach is appropriate here. By defending against Buyers' claims for breach of contract, Sellers were enforcing their interpretation of the terms of, and defending their right to retain the amounts paid by Buyers under, the Building Contract. To prove that there was no breach of the Building Contract despite Buyers' claim that the cabin was not completed on time, that the punch-list items were never completed, or that there was mold in the cabin that would justify a damages award to Buyers, Sellers had to establish that they had complied with the terms of the Building Contract. Accordingly, Sellers were engaged in an "enforcement of the terms of" the Building Contract as they interpreted them when they successfully defended against Buyers' claims that a breach had occurred. Therefore, Sellers were entitled to recover their attorney fees pursuant to the express language of the attorney fees provision.
III. Sellers Are Entitled to Attorney Fees on Appeal.
1 22 Last, Sellers request attorney fees on appeal. Because they were entitled to attorney fees in the trial court, Sellers may also recover their reasonable fees incurred on
CONCLUSION
T 23 The challenge to the trial court's summary judgment limiting Buyers' damages is moot because the jury found that Sellers had not breached the contract. By enforcing the terms of the Building Contract, Sellers were entitled to attorney fees pursuant to the attorney fee provision in the parties' agreement. Sellers are also entitled to attorney fees reasonably incurred on appeal, and we remand to the trial court for a determination of that amount.
[ 24 Affirmed.
Notes
. Buyers also alleged seven fraud claims but voluntarily dismissed those claims in response to a motion for summary judgment Sellers filed in July 2006.
. Because there have been no substantive changes to the relevant sections of the Utah Code, we cite the current version for the convenience of the reader.
. Although both parties also brief the impact of the Reciprocal Fee Statute on this question, Sellers are expressly covered by the attorney fees provision itself. Therefore, we agree with the trial court's statement that "the focus on the [Reciprocal Fee Statute] here is a red herring and an unnecessary step in the analysis."